Carrier IQ makes software that companies including AT&T Inc and Sprint Nextel install in mobile devices. It runs in the background, transmitting data that the software maker says its customer companies use to better understand their devices and networks, which allows them to improve their services.

Carrier IQ came under fire following reports that its software collects and transmits potentially sensitive data about the phone users.

“Consumers and families need to understand who is siphoning off and storing their personal information every time they use their smart phone,” Markey said in a statement.

Hacking expert Trevor Eckhart this week released a 17-minute YouTube video showing software tracking when he turns his HTC smartphone - powered by Google Inc’s Android operating system - on and off, punches numbers to make a call and writes a text message.

In a letter to FTC Chairman Jon Leibowitz, Markey asked the agency to investigate this under its mandate to protect consumers from unfair or deceptive acts or practices.

Senator Al Franken on Thursday sent a letter to Carrier IQ, asking for details on the types of data its software collects and what it does with that information.

The company said in a statement on Thursday that its software collects data needed to diagnose network and device problems, but does not record, store or transmit the contents of text messages, email, photographs, audio or video.

“Our software makes your phone better by delivering intelligence on the performance of mobile devices and networks to help (mobile) operators provide optimal service efficiency,” the company statement said.

Carrier IQ has denied accusations of wiretap law violations and allegations that its software tracks keystrokes made on mobile devices.

The company could not immediately be reached for comment on Friday.

Research In Motion said it does not install or authorize its carrier partners to install Carrier IQ’s software on its BlackBerry smartphones. Nokia also said its phones do not use the software.

Apple Inc said that some devices, including iPhones, that run on its iOS 4 operating system use the Carrier IQ software, but that it does not work with the newer iOS 5.

An FTC spokeswoman said the agency had received Markey’s letter but had no further comment.